US Indexes Hit 1-Month Highs 01/15 16:24
U.S. stocks rallied to their highest level in more than a month Tuesday
after China's government moved to inject more life into its economy by cutting
taxes and increasing spending. Netflix led a surge in high-tech companies.
NEW YORK (AP) -- U.S. stocks rallied to their highest level in more than a
month Tuesday after China's government moved to inject more life into its
economy by cutting taxes and increasing spending. Netflix led a surge in
Health care companies and banks rose as major companies including
UnitedHealth and JPMorgan Chase announced their fourth-quarter results.
The British pound wobbled after legislators soundly rejected Prime Minister
Theresa May's plan governing the country's departure from the European Union.
While the deal's defeat might herald more chaos for companies in Britain and
Europe in the months ahead, the outcome of the vote was long expected and
stocks didn't react much.
Investors were encouraged to see China makes moves to stimulate growth.
China is enduring its worst slowdown since the global financial crisis amid a
punishing tariffs dispute with the U.S.
"It shows clear signs they are worried about the economy," said Lindsey
Bell, an investment strategist at CFRA. But to investors, who want China's
economy to pick up again, Bell said the latest steps were "really welcome news."
The S&P 500 index rose 27.69 points, or 1.1 percent, to 2,610.30, its first
close above 2,600 since Dec 13. The Dow Jones Industrial Average added 155.75
points, or 0.7 percent, to 24,065.59.
The technology-heavy Nasdaq composite jumped 117.92 points, or 1.7 percent,
Chinese leaders plan to reduce taxes, increase government spending, and
provide financing to private and small enterprises in a bid to strengthen the
world's second-largest economy. China is enduring its worst slowdown since the
global financial crisis, partly because of a punishing tariff dispute with the
That helped tech companies, which make big chunks of their sales in China.
Microsoft rose 2.9 percent to $105.01 and Broadcom climbed 2.2 percent to
Hong Kong's Hang Seng rebounded 2 percent, wiping out a loss on Monday. It's
moved higher this month but is still down almost 19 percent from its peak in
late January 2018.
Japan's Nikkei 225 index, reopening after a market holiday, added 1 percent.
The Kospi in South Korea jumped 1.6 percent.
Netflix announced the biggest price increase in its history to help to pay
for its huge investment in original shows and films and finance the heavy debt
it has assumed to ward off rivals such as Amazon, Disney and AT&T. The price of
its most popular video-streaming plan will rise to $13 per month from $11.
Netflix climbed 6.5 percent to $354.75. That touched off strong gains for
the other "FANG" stocks: Facebook rose 2.4 percent to $148.95, Amazon gained
3.5 percent to $1,674.56, and Google's parent company Alphabet jumped 3.3
percent to $1,086.51.
Netflix has jumped 32.5 percent in 2019 but was worth almost $420 a share in
In Britain, the House of Commons rejected the deal May negotiated with EU
leaders by a vote of 432-202. The country is scheduled to leave the EU on March
29 after a June 2016 referendum where a narrow majority of UK subjects voted to
take Britain out of the union. It's not clear what will happen to May's
government, which faces a vote of no confidence, or the economies and financial
systems of Britain and the rest of Europe.
The pound dipped as low as $1.2670 ahead of the vote and later traded at
$1.2834, down from $1.2865 late Monday. The British FTSE 100 index closed up
0.6 percent, but banks including Lloyd's and Royal Bank of Scotland slipped.
Bell, the CFRA investment strategist, noted that British stocks have
continued to rise since the 2016 referendum because the global economy and
company profits kept growing.
"The market has taken it in stride," she said. "Maybe when we get closer to
March 29th, when they're officially done without a deal, you could see more
The FTSE 100 is up 9 percent since the vote, not much different from the
German DAX and French CAC 40, but other indexes including the S&P 500, the Hang
Seng and the Nikkei 225 have done far better.
Delta Air Lines became one of the first companies to detail how the partial
shutdown of the federal government is affecting its business. The airline says
it's on pace to lose $25 million in revenue this month. CEO Ed Bastian said the
shutdown is keeping Delta from using new Airbus jets because the planes must be
certified by safety regulators. They have been furloughed since Dec. 22 in the
longest U.S. government shutdown of all time.
An unusually high number of airport screeners have been missing work after
they did not get paychecks last week, contributing to long lines at some
Delta met Wall Street's expectations in the fourth quarter. Its stock
gyrated and finished with a gain of 0.2 percent at $47.83.
Paint and coatings maker Sherwin-Williams said it was "disappointed" with
its sales in October and November, and its profit and sales in the fourth
quarter fell short of Wall Street's estimates. Its stock fell 4.1 percent to
$381.44. Other coatings makers sank, and home improvement retailer Home Depot
gave up 1.3 percent to $176.47 while Lowe's slid 2.1 percent to $94.91.
Oil prices rose as investors felt a bit better about China's economic
growth. Benchmark U.S. crude added 3.2 percent to $52.11 a barrel in New York.
The international standard, Brent crude, gained 2.8 percent to $60.64 a barrel
Wholesale gasoline jumped 3.5 percent to $1.41 a gallon. Heating oil rose
1.1 percent to $1.87 a gallon and natural gas fell 2.5 percent to $3.50 per
1,000 cubic feet.
Gold slipped 0.2 percent to $1,288.40 an ounce and silver fell 0.4 percent
to $15.62 an ounce. Copper was unchanged at $2.63 a pound.
Bond prices inched lower. The yield on the 10-year Treasury note rose to
2.72 percent from 2.71 percent.
In Europe, the DAX edged 0.3 percent higher and the CAC 40 in picked up 0.5
The dollar rose to 108.57 yen from 108.20 yen. The euro dipped to $1.1402